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Oil prices extend losses as Fed spurs rate hike talk

Oil prices slid for a second straight day on Thursday as traders worried about abundant supplies and a dollar made stronger by Federal Reserve hints of a hike in interest rates.

PHOTO: BLOOMBERG

[NEW YORK] Oil prices slid for a second straight day on Thursday as traders worried about abundant supplies and a dollar made stronger by Federal Reserve hints of a hike in interest rates.

Brent North Sea crude for December, the global benchmark for oil, dropped to US$47.98 a barrel in London, down 60 cents from Wednesday's settlement.

US benchmark West Texas Intermediate for delivery in December slid US$1.12 to US$45.20 a barrel on the New York Mercantile Exchange.

A stronger US currency tends to weigh on demand for dollar-priced crude oil, and the dollar continued to strengthen after Fed Chair Janet Yellen's hawkish remarks Wednesday saying a hike in December would be a "live possibility" if the economy continues to strengthen.

"The big elephant in the room was Yellen with a December rate hike back on the table," said Phil Flynn, energy analyst at Price Futures Group. "I don't think the market believed it until Yellen said it." The higher likelihood of a rate hike "slowed the momentum" in the market, he said.